More good economic news, this time in retail and industrial production.
Strong growth in retail sales and industrial production in July points to a continuation of positive trends in the Croatian economy, after the GDP in the second quarter rose by more than 1 percent. Accordingly, analysts have increased their forecasts of growth for the whole year, while ministers point out that these trends are the results of the government activities, reports Novi List on September 4, 2015.
The Croatian Bureau of Statistics has published on Thursday the first assessment according to which the turnover in retail trade in July rose by 4.5 percent in real terms compared to the same month last year. That was the biggest jump in retail sales in nearly eight years and the 12th consecutive month of increase in sales, the longest such period recorded since 2007.
The Bureau also announced that the industrial production in July, according to seasonally adjusted data, increased by 3.9 percent compared to the same month last year. This is the sixth consecutive month of the industrial production increase. In the first seven months of this year, industrial production was 1.8 percent higher than in the same period last year.
“These are the highest growth rates recorded since the start of the crisis in 2008. This confirms our claims that Croatia is growing”, said deputy prime minister Branko Grčić. Talking about the strengthening of the industry, he pointed out the growth in capital goods production, which he considers to be a good sign for the growth of investment activities.
“All components of GDP continue to grow, but there are two particularly important elements, industry and trade, since they represent more than 40 percent of the GDP structure. Their growth is therefore indicative of overall growth”, said Grčić. He added that he expected good results in the third quarter and the remainder of the year as well.
Commenting on the latest statistics, minister of economy Ivan Vrdoljak said that is the result of the government’s attempts in the last three years to help the industry and adopt the industrial strategy. “We have the law on the promotion of investments, we have the growth of industry, the growth of exports, and today the government adopted new legislation that will bring about even faster pace in the growth of industry”, said Vrdoljak.
The strong growth in retail sales and production in July was a pleasant surprise for many analysts. “We have expected a growth of industrial production and retail sales compared to June, but the numbers are better than our expectations. Certainly, the growth in retail sales was supported by a good tourist season and a positive contribution of low inflation and ‘seasonal patterns’ in the labour market. In addition, there is also the positive effect of the reduction in the income tax”, said Alen Kovač, a macroeconomist at Erste Bank.
“After all the positive statistics, we have increased our estimate of GDP growth for this year to the range between 0.5 and 1 percent”, added Kovač. The forecasts of economic growth this year have also been increased by analysts at Splitska Banka and Hypo-Alpe-Adria Bank, who expect GDP growth this year of around 1 percent.